You take a $150,000 mortgage at 11% interest.?

You take a $150,000 mortgage at 11% interest. Which of the following statements is false? A. You can pay a fair amount of extra principal down on your loan (say even doubling the payment) every month or never, it's your choice whenever you want to and there will be no penalty imposed by the bank as long as you make the minimum scheduled payment. B. If you could improve your credit to reduce the rate to 8.5% over a thirty year term you would save about $100,000 in total payments. C. Over a 30 year term you will pay a total of over $500,000. By increasing your payment by only around 18% you may reduce the term by ten years and save over $200,000. D. If you take a 20 year term adjustable mortgage at 11% and in 5 years the rate goes to 12%, then in 10 years to 13% and in 15 years to 14% you have 5 years at each rate for an average of 12.5%. This costs the same as a mortgage at 12.5% fixed from the start and you save money the first ten years.

6 months ago - 1 answers